Novice high networth investor eager for feedback on strategies

[Abby Li]

Novice high networth & income investor eager for feedback on strategies

Hi Everyone,

Due to my job and gracious family gift, I have some capital ready to invest (refer to below for details). I have been listening to podcasts, researching online (mainly the BP forum), going to local RE investor meetups, and talking to financial advisors. After several months of research, I have “developed” a plan which I’m quite nervous about given my lack of knowledge and experience. So I’m hoping to draw on your expertise and would greatly appreciate if you could review my plan and provide feedback, e.g, change up the allocation, ditch one or more of the options, etc., all feedback is welcome. Also, I would also appreciate if you can provide recommendations / referrals on service providers.

Current Situation

$450K deployable cash

$550K primary residence in Southern California – own it free and clear & no other debt and thus refinancing will be a feasible option

$450K rental property in SoCal – own it free & clear -> ~ 3% COC & 2% appreciation -> eager to look out of state

~ $150K Annual income – quite stressful job and thus looking for passive investing options with periodic updates to keep me in the loop

~ $100K in stock/bond/mutual funds generating ~ 4% annual return – open to re-allocate these investments if RE investing proves to have better returns

Age - Under 30 -> Risk tolerance level of 3 (1 being most risk-averse and 5 being most risk-tolerant)

Goal – Building long-term wealth with healthy short-term cashflows

My Little Plan

1.~ $300K in Turnkey properties with the below breakdown

a. Memphis, TN - $120K to $150K with Memphis Invest due to their reputation - projected 5-6% annual COC return

b. Central Florida (mainly Jacksonville, Orlando, Tampa) - $120K to $150K – haven't landed on a provider yet, thinking about JWB Capital or Norada RE, both have decent reviews - greatly appreciate your recommendations -> maybe 5-6% COC return?

2.~ $150K in one or both of the below options

a. Online crowdfunding sites (e.g., RealtyShares, RealtyMogul, etc.) -> annual ~7% post-tax return

b. Syndication deals – Talked to the speaker at a local FIBI event. He is heavily involved with buying mortgage backed securities / second lien debt. I have no prior knowledge about this, but I work in Finance related industry, so I can do due diligence if decide to go down this route. The concept is appealing and I’ve learned that regulation has tightened up post 08 crisis. -> 9% preferred return and then 50/50 split of the remaining profit, pre-tax -> ~7-8% post-tax

3. (Later down the line) ~$300K from refinancing my primary residence and invest in one or more of the above options if they go well. For example, Memphis Invest also invests in Texas. So if the Memphis deal goes well, then I might continue investing with them in Dallas.

Thank you for reading through the post. Look forward to hearing from you!